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KPN spreads remained volatile this week after the Dutch telco dispelled hopes of a Eu5.5bn rights issue to reduce its debt. Over the past fortnight, spreads on KPN's outstanding bonds had been tightening as market expectations grew. But the bonds gave up most of those gains on Monday after the company said it did not plan a rights issue. KPN said it would focus on forging an alliance with another player in the European market.

Landesbank Rheinland-Pfalz has closed a $15 million callable trade via ABN Amro. The trade is callable after the first year and during the first year interest will have a floating rate, linked to 6m US$ Libor+50 basis points. If the trade is not called, the floating rate will become fixed rate. Frank Parensen, Landesbank Rheinland Pfalz's funding officer, says: "We've done quite a few of these callables this year - driven by investor demand. I think the investors are mostly out of Asia - mainly Japan. We have already done 51 issues this year, raising $6.5 billion. We have between $3 billion and $4 billion still to do this year."

Bahrain Bank of Bahrain and Kuwait (BBK) has awarded seven banks the mandate to arrange a $100m loan.

Nationwide Building Society (Nationwide) has issued a £

AIG Financial Products has hired Jeffrey Robbins, ceo of derivatives boutique First Chicago Tokio Marine Financial Products in Tokyo, and a 15-year veteran of First Chicago/Bank One, as managing director, marketing in Tokyo. In this new position Robbins is responsible for marketing the firmÕs structured financial products. AIG FP likely will expand the operation with additional hires, Robbins noted, declining to elaborate.

* Bank of Nova Scotia Rating: Aa3/A+/AA-

Finconsumo, the Italian lender jointly owned by Istituto Bancario San Paolo di Torino and CC-Holding GmbH, the German subsidiary of Banco Santander Central Hispano, this week launched its second securitisation of consumer loans in a deal worth Eu258.3m. Lead managed by Crédit Agricole Indosuez (books) and Banco Santander Central Hispano, the deal was structured differently to the one launched last December, to give it greater appeal to investors.

French car manufacturer Peugeot Citroën this week launched its first securitisation - a Eu1bn deal backed by some 216,000 of its French car loans. Lead managed by Crédit Agricole Indosuez and Deutsche Bank, the deal is the largest securitisation backed by auto loans to be launched out of Europe and the first by a French captive for some 10 years.

IntesaBci, the result of the recent merger between Intesa Bank and Banca Commerciale Italiana (BCI), this week launched a Eu805m synthetic securitisation backed by a portfolio of credit derivatives. BCI has a history of bringing innovative synthetic deals out of the Italian market. It completed the first ever public collateralised loan obligation to come out of the Italian market in November 1999 with a Eu4bn deal called Scala 1, backed by a portfolio of revolving facilities and term loans.

Collateralized Debt Obligation managers are complaining about the fee-based roles the Street's underwriters play in bringing CDOs to market. More than just traditional Street versus customer wrangling, their complaints center around the fact that the fees charged for selling the paper--2% is standard--equals several years worth of management fees for the CDO manager.

Lehman Brothers and Société Générale are structuring synthetic collateralized debt obligations based on reference portfolios of 1.5 billion ($1.28 billion) and 500 million, respectively, according to indicative term sheets obtained by LMW sister publication, Derivatives Week. SG's deal, called Grande Armée, is a five-year CDO referenced to 45 loans. The Lehman Brothers transaction, dubbed Sprint 2001-4, is a seven-year arbitrage deal structured on a portfolio of credit default swaps referenced to 100 corporates. Officials at Lehman and SG declined all comment.

Dealers are watching asbestos credits this week after USG Corporation filed for Chapter 11 bankruptcy. A total of $20 million of Owens Corning's debt has traded at 62-63, which is down slightly from the mid-60s. A $4 million piece of American Home Patient's debt inched up to 81. Finova Group's debt is trading at 91, which is down a point from a trade earlier this month.